[Editor's note: some of the pictures in this article are large - around 2MB each - and may take some time to load, depending on the speed of your connection.]

My first cameraphone was a Sony Ericsson T68i, which added the camera in the form of a bolt-on attachment to the handset itself . I used that almost exactly 11 years ago, taking it on a birthday-present-to-myself trip to India. I still have the handset somewhere; sadly, none of the photos has survived.

At the time the camera element seemed both miraculous and pointless. I couldn't see why anyone would want to take pictures with a phone, given how poor they were, but I remember applauding the sheer demented genius of joining two apparently very different bits of hardware to create a Frankenstein's monster of consumer technology.

Fast forward 11 years, to what is now the state-of-the art cameraphone – the Nokia Lumia 1020. In the age of instant, always-on social media, adding a camera to a phone now makes perfect sense: people take and share photographs every minute of every day thanks to the vast improvement in the camera technology and much better mobile connectivity.

Nokia first unveiled the technology that now graces the 1020 in its 808 Pureview in July last year. At the time it was hailed as spectacular, but a dead end, as it was part of the Finnish company's final Symbian phone.

The good news is that it's still spectacular, even more so now as it's on the latest handset in the Windows Phone Lumia range. It's not perfect, but it's a cameraphone that, while it doesn't make my trusty Nikon D80 redundant, does make me think twice about lugging it along to events.

I add a small handful of apps - Google Search, Adobe Reader, Kindle, PrimeTube and Addison Lee - to a Windows Phone handset, but then I'm not a big user of apps, not least because so much functionality is baked in to the OS. WP comes with Office, plus 7GB of Skydrive space; and the People hub integrates Facebook, Twitter and LinkedIn: all three also provide official apps, but there's little need to fire them up. The most problematic absences are Google's apps: the ongoing spat between Google and Microsoft over YouTube continues to rumble, while Gmail users will shortly have to use three protocols (IMAP, CalDAV and CardDAV) to connect a WP device to their stuff as Google is withdrawing access via Exchange Active Sync. If you're a big Google user, while you can connect, it's trickier than on other platforms – and some might well find that a reason to choose another platform.

Camera: the technology bit

First, here's the technology bit (and here's a PDF from Nokia to explain it). The heart of the camera is a 41-megapixel (MP) sensor which uses 1.1-micron back-side-illuminated pixels. What that means is a bigger area to capture light: it's the same idea as a medium-format camera, which seeks to improve the quality of images by having a bigger light-collecting device than its smaller counterpart, the SLR (single lens reflex) camera.

The comparison ends there, though. More and bigger pixels do usually equate to coarser grain and "noisier" (less precise) images, the processing software means that this camera oversamples – in other words, it takes information from all the pixels to produce one 5MP image that is really good.

That 5MP image is the one that's available for sharing, and you can post it from the app direct to Facebook, Twitter, LinkedIn or SkyDrive, or add it to an email or picture message. You can also send your picture to OneNote, which is part of the Office suite all Windows Phones bundle.

However, the benefit of those bigger pixels and bigger sensor really become clear when you look at the 38MP image captured at the same time as the smaller image. Blow it up, and the detail captured even at full magnification is really impressive. I was half a mile away from Tower Bridge (according to Google Maps), when this shot was taken.

Detail at close range on a 38MP image is almost uncomfortably good: blown right up, you can see my reflection in Rory Cellan-Jones's eye as I take the picture.

While the sensor and the software are very important, nothing is more important when it comes to good pictures than the lens. Nokia has done its very best here, using a six-part assembly by Carl Zeiss, which has been a byword for high-quality lenses since the 19th century. Inevitably, this is an area where the image quality suffers: it's very difficult to get the best optics out of such a small assembly. Looked at in detail, images can suffer from purple fringing and I think the edges are rather soft.

That could reasonably be described as nitpicking: while these images wouldn't bear too much comparison with an image taken with a full-frame DSLR, or even a dedicated, good-quality point and shoot, for a cameraphone, they're stunning.

Gyro heaven

The camera is, like its predecessors in the Lumia range, housed in a gyroscope, which means that the shutter can be open for longer – so you can take good images in low light. I prefer not to use a flash if possible, and most of the time you won't need one. Images such as this

shot in auto mode, indoors with tungsten light, are good. The camera struggles a bit with white balance on auto mode in low light with mixed light sources, as you might expect

But it does well at duskand in party lighting.

The 1020 has won praise elsewhere for its Xenon flash; I am less convinced by it – any flash can swamp and flatten a scene, and this is no exception. (Example without and with flash.)

Camera in use

So much for what the images are like; what's the camera like to use? The 1020 comes with the latest iteration of Nokia's camera software, Nokia Camera Pro – and that's also now available for other Lumias including the 920 and 925. It's the default software, and launches when you press the camera button on the phone.

You can shoot in auto mode, or you can adjust the white balance, ISO, focus, shutter speed and exposure value, as well as turn the flash on and off, and kill the focus light – which I always do, as a focus light firing will make your subjects think the flash has gone off and the photo is taken, so they move and the shot is ruined.

In auto mode the display tells you that all the settings are in auto. In the top left corner is the edit icon – tap that when the image is saved and it will be opened in editing mode.

Next to that, a tiny circular thumbnail of the image is seen: tap that, and you'll be taken to a screen where you can crop the 38MP image – you can also change the aspect ratio of your shot here. The framing grid is off by default; I've turned it on.

In the bottom right corner are two arrows in a circle: tap that, and you'll be offered a choice of other "lenses", or imaging software, with which to take your shot. The phone ships with Bing Vision (which scans barcodes and QR codes); Nokia Cinemagraph (with which you can create animated gifs); Panorama (self-explanatory); Camera (the point-and-shoot predecessor to the Pro Cam app) or Nokia Smart Cam.

That gives you another series of options: Motion Focus, which adds blur to suggest motion; Action Shot, which adds a strobe effect; Remove Moving Objects, which allows you to get rid of unwanted objects (your ex, perhaps); and Change Faces, where you can do what it says on the tin. There are other lenses apps in the Windows Phone store; doubtless more will follow (though no Instagram yet, filter fans).

If you want to play with the camera settings in Pro Cam, sweep the camera icon right and the settings screen appears.Sweep one of the settings up and the preview will show you what the effect will be (like this, or this, or this, for example).

It's worth experimenting with these settings as you can get some nice effects, such as motion blur by choosing a slower shutter speed.

Once you're happy with how the shot looks, you can either tap the screen or press the camera button (which is under your right index finger when holding the phone in landscape orientation) to fire the shutter. As the camera focuses, you'll feel the mechanism moving inside the phone, which is a little disconcerting at first.

One irritation with this device is that the shutter is slow to fire (and indeed, the camera app is slow to start up). Although setting a fast shutter speed can freeze action, it won't capture your scene any faster, which means that if you like to grab moments with quick, spontaneous shots, this probably isn't the device for you. It's also rather slow to process the image and show you the result and then take you to the Pro Cam app for editing.

Moving pictures

Video is good, offering a choice of resolutions and frame rates, from 720p/24fps right up to 1080p/30fps, though of course the higher the quality, the more disk space you'll eat on the device – and as with previous Lumias, there's no SD slot. The phone comes in 32GB and 64GB flavours, but for now at least the 64GB model is an O2 special in the UK. However, it does come with 7GB of space on SkyDrive, Microsoft's equivalent to Dropbox, which integrates tightly with all Windows Phone handsets.

Video settings are, as with stills, accessed via the video app rather than the primary Settings app, and, as with the stills camera, you can adjust settings manually, though with video you only have access to the focus and white balance - playing with that particularly can produce some quite startling effects.

Here's one: and another:

Video editing

One piece of good news for Lumia users frustrated by the inability to edit video on the device itself is that Nokia has now released an app – Nokia Video Trimmer - which is straightforward to use, though limited in function: all you can do is trim the beginning and the end. Sharing to Facebook or Skydrive is done via the video app, but if you want to post your masterpiece to YouTube, you'll need the Nokia Video Upload app. (Both of these apps are available for earlier Lumias that have had the Amber OS update.)

The hardware isn't much different, either: the heart of the 1020 is the same Qualcomm Snapdragon 1.5GHz processor, though the 1020 gets a boost to 2GB of RAM.

The specifications for the 1020 show that it is slightly lighter than the 920 (158g against the 920's 185g). Its 1020 camera stands proud of the back, so it can't lie flat, but it still feels less of a slab than its predecessor (although the 925 is a much slimmer and lighter phone, weighing in at 139g. For comparison, the iPhone 5S weighs 112g; HTC One, 130g; Samsung Galaxy S4 130g; BlackBerry Z10, 137.5g.).

The 1020 is made of a matte polycarbonate, which is a little more subtle than the glossy polycarbonate of the 920 – though the best looker of the Lumia handsets remains the brushed aluminium of the 925. Colourwise, you get a choice of radioactive custard-yellow, or a more sober black or white.

For those planning to use the camera more than casually, consider getting the camera grip, which makes it feel, well, more like a camera. It adds weight and bulk, but crucially it also adds an extra battery: snapping away will drain the battery surprisingly quickly.

If you want to see what the camera is capable of in the hands of professionals, it's worth looking at the images shot by the legendary photographers David Bailey and Bruce Weber, who both took a 1020 on to the streets of Harlem, New York, earlier in the summer; their high-res images can be downloaded and blown up and are far more impressive than any of my shots.

Pros: stunning high-res images, build quality, additional camera grip

Cons: apps slow to boot, shutter slow to fire, rather long processing time.